HOUSTON-With office buildings trading fast and furious, the latest real estate to hit the block is the 1.7-million-sf Wells Fargo Plaza, an un-priced offering with a $283-million tax assessment. In the CBD, comparable high rises have been trading for $275 per sf.
Owned by New York City-based Metropolitan Life Insurance Co. since the early 1980s, the seller is disposing of the asset at 1000 Louisiana St. in a time of high demand and low supply. “A scarcity of space in the CBD and underlying fundamentals of the Houston office market as well as the overall Houston economy are the main factors for the offering,” says Kent Peters, senior vice president for CB Richard Ellis in Houston.
Peters says the sale of the 91%-leased high rise could set a new benchmark in terms of pricing, adding there's already been strong interest from both domestic and offshore institutional investors. He tells GlobeSt.com that MetLife would like to close the sale by the end of the year. He and CBRE's executive vice president Richard Rudd, also from Houston, are teaming with CBRE vice chairman and partner Darcy Stacom in New York City and executive vice president Russell Ingrum in Dallas.
Peters says another pot sweetener for potential investors is the recapture of two continuous blocks, totaling 250,000 sf, at the beginning of January. The upcoming blocks are in the mid-rise banks. Meanwhile, the tenant roster includes credit names like Dynegy Inc., Baker & Hostetler LLP, Texacom Corp. and Skadden Arps Slate Meagher & Flom LLP.
In 2005, MetLife invested $7 million into renovating the main lobby and sky lobby, creating a common-area executive board room and auditorium and adding the Houstonian Lite fitness club. CBRE currently leases the building.
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